Seattle Children’s, Regence settle dispute over insurance networks

A nearly yearlong dispute in which Seattle Children’s hospital sought to make sure its facilities and experts were included in Washington state health insurance plans was finally resolved Tuesday.

Children’s and Cambia Health Solutions, parent company of Regence BlueShield and BridgeSpan Health, announced that the hospital will be part of the insurers’ network of health-care providers.

“This is great news for Washington families who are covered by BridgeSpan, Cambia’s plan on Washington’s Health Benefit Exchange, because it will allow them to access Seattle Children’s Hospital at the in-network rate,” Sandy Melzer, senior vice president and chief strategy officer of Children’s, said in a statement.

Don Antonucci, president of Regence BlueShield, echoed the sentiment in a joint statement, saying his organization was “thrilled” to provide access to Children’s for plans both inside and outside the exchange.

The agreement covers insurance plans in the individual and small group markets for coverage that starts Jan. 1, 2015.

In October, Children’s called on the state to reject insurance plans for 2014 that didn’t include Children’s in their networks of hospitals and doctors.

Children’s filed a case in King County Superior Court and an administrative appeal with the Office of the Insurance Commissioner (OIC). It argued that health plans lacking its services did not meet legal requirements for adequate coverage and should not be sold on the state’s exchange, called Washington Healthplanfinder.

Since then, Children’s gradually has reached agreements with the insurers that originally excluded them. They include Molina Healthcare of Washington, Coordinated Care Corporation, and Premera Blue Cross and its subsidiary LifeWise.

It’s unclear if Children’s is in all of the networks, but “we know we are in the plans that will cover the majority of the population that will utilize the exchange,” Children’s spokeswoman Stacey Dinuzzo said by email.

The question of who’s included in an insurance plan’s network has become a hot topic in the era of health-care reform.

In the past, insurance companies were able to control costs in part by refusing to cover sick people and through limits on which services plans would cover. The Affordable Care Act changed that by outlawing the exclusion of people based on preexisting conditions and by establishing a set of fundamental benefits that all plans must include.

That has left insurance companies with fewer economic levers to pull. So many are controlling costs by shrinking their provider networks.

This spring Insurance Commissioner Mike Kreidler approved rules defining what insurance companies needed to do to ensure that their provider networks were sufficiently robust. The regulations don’t explicitly say which hospitals must be included, but emphasizes transparency so consumers can more easily figure out who is covered and requires insurers each month to update their lists of who is in their network.

Kreidler applauded Tuesday’s announcement.

“If we expect innovations in the health-care industry, then we have to be willing to let the parties involved create them and not over-regulate them,” Kreidler said in an email. “And if done right, they can help keep costs down and offer more options for consumers.”

The controversial issue of who is included in a network became more sensational this May when the OIC’s chief presiding officer assigned to the case, Patricia Petersen, filed a whistleblower complaint alleging that another OIC employee had tried to influence her rulings in the matter.

This summer an independent investigator concluded that Petersen had been misleading and untruthful in her characterization of incidents related to the case. Petersen and her attorney rejected the investigator’s conclusions and argued she was fighting for “judicial independence.”

About the blog

HealthCare Checkup is a new blog dedicated to helping readers understand the Affordable Care Act and how the federal health-care law affects everyone – insured or not. Reporters in Seattle, Olympia, and Washington, D.C. contribute. The editors are Beth Kaiman and Mark Watanabe.

The blog is produced through a partnership with Kaiser Health News, an editorially independent part of the Kaiser Family Foundation, a health policy research and communication organization that is not affiliated with Kaiser Permanente.